Wednesday, December 10, 2008

This is the 3rd Quarter 2008 edition of our ongoing hedge fund tracking series. Before reading this update, make sure you check out the preface to the series we're doing on Hedge Fund 13F's here. We've already covered:

Next up is Bruce Kovner's Caxton Associates. The $10 billion firm is one of many global macro oriented funds which we cover. This is a switch from some of the more value oriented funds we've been covering, like the 'Tiger Cub' funds including Stephen Mandel's Lone Pine Capital, Lee Ainslie's Maverick Capital, John Griffin's Blue Ridge Capital, and Andreas Halvorsen's Viking Global. Global macro funds seek to find investments in whatever market they can gain an edge, whether it be equities, bonds, currencies, debt, commodities, and more. So, keep in mind that these equity positions only represent a portion of the fund's overall holdings. They are not required to disclose holdings outside of equities, notes, and stock options.

Kovner comes from the group of "offspring" of the legendary Commodities Corp. Kovner emerged as a successful offspring along with fellow great macro traders Paul Tudor Jones (Tudor Investment Corp), and Louis Bacon (Moore Capital Management). If you want to hear some insightful thoughts from Bruce Kovner himself, head over to our post on Hedge Fund manager interviews. Taken from Wikipedia, Kovner's bio is as follows: "Kovner's first trade was for $3,000, borrowed against his MasterCard, in soybean futures contracts. Realizing growth to $40,000, he then watched the contract drop to $23,000 before selling. He later claimed that this first, nerve-racking trade taught him the importance of risk management. In his eventual role as a trader under the legendary Michael Marcus at Commodities Corporation (now part of Goldman Sachs), he purportedly made millions and gained widespread respect as an objective and sober trader. This ultimately led to the establishment of his current company, Caxton Associates, in 1983, which today manages over $10 billion in capital and has been closed to new investors since 1992." As of the end of October, Caxton's Global Investment Fund was up 7.25%.

Before beginning, you might be interested in checking out Caxton's portfolio holdings from Q2 2008. Also, we noted that Caxton had recently boosted their stake in Ferro (FOE) to 5.2%. The following were Caxton's long equity, note, and options holdings as of September 30th, 2008 as filed with the SEC.

Some Reduced Positions (Positions they sold some shares of - note not all sales listed)DirecTV (DTV): Reduced position by 51%Coca Cola (KO): Reduced position by 42%Estee Lauder (EL): Reduced position by 36%Gilead Sciences (GILD): Reduced position by 32%Schlumberger (SLB): Reduced position by 32%General Mills (GIS): Reduced position by 26%Union Pacific (UNP): Reduced position by 24%Total (TOT): Reduced position by 20%Omnicom (OMC): Reduced position by 16%W.R. Grace (GRA): Reduced position by 7.5%Berkshire Hathaway (BRK.A): Reduced position by 6%

Assets from the collective holdings were $6.5 billion last quarter and were only $2.2 billion this quarter. Much like fellow Commodities Corp 'offspring' Paul Tudor Jones and Louis Bacon, Kovner was also decreasing exposure to equities all across the board. Please note that we have not detailed every single change to every single position in this update, but we have covered all the major moves. Also, keep in mind that these filings only include long equity, notes, and options holdings and do not reflect their cash, short portions, or holdings in other markets (currency, commodities, debt, etc). This is just one of many funds in our hedge fund tracking series in which we're tracking 35+ prominent funds. We've already covered Whitney Tilson's T2 Partners, Peter Thiel's Clarium Capital, Bill Ackman's Pershing Square, Stephen Mandel's Lone Pine Capital, Lee Ainslie's Maverick Capital, Timothy Barakett's Atticus Capital, John Griffin's Blue Ridge Capital, Bret Barakett's Tremblant Capital, Andreas Halvorsen's Viking Global, John Paulson's Paulson & Co, David Einhorn's Greenlight Capital, and Dan Loeb's Third Point, Paul Tudor Jones' Tudor Investment Corp, and Louis Bacon's Moore Capital Management. Overall, its been one of the worst years ever for hedge funds, as we noted in our recent November hedge fund performance update. Thus, the recent moves they've made in their portfolios become all the more interesting given the way the market has played out.

This is the 3rd Quarter 2008 edition of our ongoing hedge fund tracking series. Before reading this update, make sure you check out the preface to the series we're doing on Hedge Fund 13F's here. We've already covered:

Next up is Bruce Kovner's Caxton Associates. The $10 billion firm is one of many global macro oriented funds which we cover. This is a switch from some of the more value oriented funds we've been covering, like the 'Tiger Cub' funds including Stephen Mandel's Lone Pine Capital, Lee Ainslie's Maverick Capital, John Griffin's Blue Ridge Capital, and Andreas Halvorsen's Viking Global. Global macro funds seek to find investments in whatever market they can gain an edge, whether it be equities, bonds, currencies, debt, commodities, and more. So, keep in mind that these equity positions only represent a portion of the fund's overall holdings. They are not required to disclose holdings outside of equities, notes, and stock options.

Kovner comes from the group of "offspring" of the legendary Commodities Corp. Kovner emerged as a successful offspring along with fellow great macro traders Paul Tudor Jones (Tudor Investment Corp), and Louis Bacon (Moore Capital Management). If you want to hear some insightful thoughts from Bruce Kovner himself, head over to our post on Hedge Fund manager interviews. Taken from Wikipedia, Kovner's bio is as follows: "Kovner's first trade was for $3,000, borrowed against his MasterCard, in soybean futures contracts. Realizing growth to $40,000, he then watched the contract drop to $23,000 before selling. He later claimed that this first, nerve-racking trade taught him the importance of risk management. In his eventual role as a trader under the legendary Michael Marcus at Commodities Corporation (now part of Goldman Sachs), he purportedly made millions and gained widespread respect as an objective and sober trader. This ultimately led to the establishment of his current company, Caxton Associates, in 1983, which today manages over $10 billion in capital and has been closed to new investors since 1992." As of the end of October, Caxton's Global Investment Fund was up 7.25%.

Before beginning, you might be interested in checking out Caxton's portfolio holdings from Q2 2008. Also, we noted that Caxton had recently boosted their stake in Ferro (FOE) to 5.2%. The following were Caxton's long equity, note, and options holdings as of September 30th, 2008 as filed with the SEC.

Some Reduced Positions (Positions they sold some shares of - note not all sales listed)DirecTV (DTV): Reduced position by 51%Coca Cola (KO): Reduced position by 42%Estee Lauder (EL): Reduced position by 36%Gilead Sciences (GILD): Reduced position by 32%Schlumberger (SLB): Reduced position by 32%General Mills (GIS): Reduced position by 26%Union Pacific (UNP): Reduced position by 24%Total (TOT): Reduced position by 20%Omnicom (OMC): Reduced position by 16%W.R. Grace (GRA): Reduced position by 7.5%Berkshire Hathaway (BRK.A): Reduced position by 6%

Assets from the collective holdings were $6.5 billion last quarter and were only $2.2 billion this quarter. Much like fellow Commodities Corp 'offspring' Paul Tudor Jones and Louis Bacon, Kovner was also decreasing exposure to equities all across the board. Please note that we have not detailed every single change to every single position in this update, but we have covered all the major moves. Also, keep in mind that these filings only include long equity, notes, and options holdings and do not reflect their cash, short portions, or holdings in other markets (currency, commodities, debt, etc). This is just one of many funds in our hedge fund tracking series in which we're tracking 35+ prominent funds. We've already covered Whitney Tilson's T2 Partners, Peter Thiel's Clarium Capital, Bill Ackman's Pershing Square, Stephen Mandel's Lone Pine Capital, Lee Ainslie's Maverick Capital, Timothy Barakett's Atticus Capital, John Griffin's Blue Ridge Capital, Bret Barakett's Tremblant Capital, Andreas Halvorsen's Viking Global, John Paulson's Paulson & Co, David Einhorn's Greenlight Capital, and Dan Loeb's Third Point, Paul Tudor Jones' Tudor Investment Corp, and Louis Bacon's Moore Capital Management. Overall, its been one of the worst years ever for hedge funds, as we noted in our recent November hedge fund performance update. Thus, the recent moves they've made in their portfolios become all the more interesting given the way the market has played out.

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